RBC revises New Brunswick’s GDP growth projection upward

NEW BRUNSWICK – The Royal Bank of Canada (RBC) is now projecting New Brunswick’s real GDP to grow by 1.1 per cent in 2017, exceeding growth forecast expectations contained in the 2017-2018 budget

“New Brunswick is trending in the right direction when it comes to economic growth, as reaffirmed recently by private sector forecasters and rating agencies,” said Finance Minister Cathy Rogers. “As a government, we are pleased with these third party reports and remain committed to both our Economic Growth Plan and our fiscal plan to return balance to our finances by 2020-21.”

With RBC’s revision, the consensus forecast among private-sector economists for 2017 is now one per cent and is slightly above expectations from when our government released its budget in February.

Finance Minister Cathy Rogers

RBC noted in its report that New Brunswick’s economic growth in 2016 was stronger than expected due to strong wage growth in a number of consumer service industries and an upswing in the construction industry. Capital spending and a strong performance from the natural resources sector also helped to boost jobs and sustain another year of above-average growth in the province. RBC also highlighted that the rebound in New Brunswick’s labour market shows signs of continuing in 2017.

Standard and Poor’s, a global credit rating agency, also announced recently that New Brunswick has maintained an A+ credit rating with a stable outlook, highlighting modest improvements in budgetary performance, a predictable and well-managed institutional framework, and slow but positive economic growth. The province has received an A+ rating from the agency for three consecutive years.

In March, Moody’s Investors Service affirmed the province’s Aa2 rating with a stable trend. In April, Dominion Bond Rating Service confirmed the A (high) rating with a stable trend.

A report from Statistics Canada also recently reaffirmed the province’s economic performance, marking two consecutive years of growth. Statistics Canada estimates that, in 2016, real GDP for New Brunswick expanded by 1.4 per cent.

“With RBC’s revision, the consensus forecast among private-sector economists for 2017 is now one per cent and is slightly above expectations from when our government released its budget in February,” said Rogers. “This is positive, and is further evidence that our government’s prudent, and balanced approach in terms of making strategic investments in the economy is working.”

Since 2014, the government has cut the province’s deficit in half, and Rogers said it is on track to eliminate the deficit by the 2020 budget. The province’s economic growth hit a 10-year high in 2015, surpassed expectations in 2016, and has seen upward revisions to the forecast for 2017. In addition, the government supported the creation of almost 10,000 jobs since 2014, while employment has increased by 4,300 so far this year compared to the opening four months of 2016.

The New Brunswick Economic Growth Plan is the provincial framework for growing the economy and creating job opportunities for New Brunswickers. It outlines how the government will mobilize to ensure there is a co-ordinated, complementary effort to improve the province’s economy and realize maximum economic benefits.

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